Federal judge halts Higgins hotel project on Park Ridge border
These renderings, from the website of Intercontinental Regional Center Trust of Chicago, appear to show a hotel and convention center project that was planned for the 8200 block of Higgins Road. A judge halted the project on Feb. 20.
Updated: April 1, 2013 6:12AM
A federal judge has halted a large-scale hotel and convention center project proposed for Chicago’s Northwest Side near the city of Park Ridge.
Alleging that developers schemed to defraud overseas investors with promises of a path to U.S. residency, the U.S. Securities and Exchange Commission on Feb. 6 sought a preliminary injunction against the project slated for the 8200 block of Higgins Rd., east of Cumberland Avenue. On Feb. 20, Federal Court Judge Amy St. Eve granted that injunction.
The SEC’s legal complaint, filed against Chicago-based developer Anshoo R. Sethi and his companies Intercontinental Regional Center Trust of Chicago, LLC, and A Chicago Convention Center, LLC, alleges that the defendants “used false and misleading information to solicit investors in the purported hotel and conference center project.”
The complaint states that Sethi and his companies, which included family members, hatched an investment scheme involving the fraudulent sale of over $145 million in securities and the collection of $11 million in administrative fees from over 250 Chinese investors looking to obtain citizenship in the United States through an investment visa program known as EB-5. The complaint goes on to allege that the defendants made false claims to their investors, including that three high-end hotel chains that signed on to the project and that all required permits and approvals to begin construction had been obtained.
The SEC also contends that the $177.5 million value placed on the Higgins Road property by the would-be developers was not accurate and even “vastly overstated.”
The hotel, reportedly in the planning stages since 2006, was to have included 994 rooms plus convention space, according to a description from TR Mandigo & Company, a Chicago-based hotel consulting firm, the SEC said. The O’Hare Garden Inn on the site was recently demolished.
In granting a preliminary injunction, St. Eve also ordered that all funds and assets of the defendants be frozen and they be temporally restrained from marketing LLC interests in A Chicago Convention Center.
Attorney Scott Mendeloff, who is representing Sethi, said his client did not oppose the preliminary injunction.
“We said in court that we want the money sent back to the investors as quickly as possible,” Mendeloff told the Park Ridge Herald-Advocate.
When asked to comment on the SEC’s allegation that Sethi had defrauded potential investors in the hotel project, Mendeloff said, “Just because someone makes allegations doesn’t they are accurate.”
Mendeloff said no criminal charges have been filed against his client. He declined to comment on the future of the would-be hotel development.
On Feb. 19 one of the hotel project’s Chinese investors filed a motion to intervene in the SEC’s case, requesting that over $500,000 in funds wired to the defendants remain in escrow “so as to allow him to invest in a legitimate EB-5 program and further his goal of becoming a U.S. citizen.”
Some Park Ridge residents living near the proposed hotel site had expressed concerns to city officials, primarily about traffic the development could generate, according to Park Ridge Director of Preservation and Community Development Jim Testin.